New Hampshire on Verge of Becoming a Right-to-Work State

The Union Leader just reported that New Hampshire is on the verge of becoming a right-to-work state:

The New Hampshire Senate voted 16-8 to pass a right-to-work bill this morning.

House Bill 474 would end the rights of unions to collect fees from non-union members in companies they represent, and would make it illegal for companies to deduct those payments.

Union officials yesterday said the bill is an attack on the dwindling middle class. Those who favored the bill said it is a matter of freedom and personal choice, and argued it will attract new business to the state.

Gov. John Lynch has said he will veto the bill if it gets to his desk. The Senate vote would provide enough for the two-thirds vote it needs to override that veto.

The House passed the bill 221-131, short of a veto override vote. If the House agrees with changes the Senate made, it will go to Lynch’s desk. If not, the bill will to a committee of conference for a compromise.

If this passes, there will be a new sucking sound . . . the sound of jobs pouring into New Hampshire from neighboring states.

The Great Tax Divide: New Hampshire’s Retail Oasis vs. Maine’s Retail Desert

For those of you who may be wondering why my blog posts have been a bit irregular, you can blame my latest study: “The Great Tax Divide: New Hampshire’s Retail Oasis vs. Maine’s Retail Desert.”  There are two versions of the study, one focused on Maine (published by The Maine Heritage Policy Center) and one focused on New Hampshire. (published by the New Hampshire Center for Economic Policy)

Here is the Executive Summary from the Maine version:

It is well-known that Maine and New Hampshire are polar opposites when it comes to tax policy.  Maine has one of the highest tax burdens in the country at 12.6 percent of personal income (6th highest) while New Hampshire has one of the lowest tax burdens at 8.7 percent of personal income (49th highest).  These 3.9 percentage points represent one of, if not the, largest tax differentials between any two states in the country and is the basis for “The Great Tax Divide.”

The close geographic proximity of the two states leads to numerous arbitrage opportunities for Mainers to escape their significantly higher tax burden.  The most obvious way is through direct cross-border shopping which previous MHPC studies have shown to be occurring up and down the Maine-New Hampshire border.  This study builds on this research by utilizing comprehensive retail data from the U.S. Census Bureau over the last 60 years.

More specifically, Mainers are engaging in cross-border shopping in New Hampshire in response to Maine’s higher sales tax, cigarette tax, gasoline tax, bottle tax and alcohol taxes (beer, wine and liquor).  Additionally, retailing in New Hampshire was given a significant boost in the early 1990’s when they reformed their tax code instituting the Business Enterprise Tax in place of other job-killing taxes.

Overall, Chart 1 shows that per capita retail sales in the adjacent bordering counties in Maine (Oxford and York) and New Hampshire (Coos, Carroll, Strafford and Rockingham) have been diverging ever since Maine adopted the sales tax in 1951.  By 2007, the retail gap was $8,660 per person ($19,976 versus $11,316).  If Maine had the same level of retail activity as New Hampshire, retail sales would have been up to $2.2 billion higher—from $2.9 billion to $5.1 billion—and created thousands of retail jobs.

Chart 1 Per Capita Border County Retail Sales (Maine vs. New Hampshire)

Additionally,the big-box retailers are well aware of this retail sales gap.  The map below shows the placement of the major big-box stores (Walmart, Home Depot, Lowes and Target) along the Maine-New Hampshire border.  Note that there is a 40+ mile “retail desert” on the Maine side while the big-box stores on the New Hampshire side cluster as close to the border as is physically possible.  Think they know something that Maine’s policymakers don’t?


View The Great Tax Divide: Maine in a larger map

Intermission: Granite State of Mind 2 (Plow Guy Boogaloo)

This video opens with the New Hampshire state house as the backdrop. Hard to believe they fit all 424 members of the Legislature in there–the fourth largest legislative body in the english-speaking world. A little extra New Hampshire trivia before the featured trivia presentation . . .